Payments Blog

Once again, the holiday season has come and gone, seemingly in an instant. During this two-month period, consumers continued to migrate towards digital channels, and away from brick-and-mortar stores, to do their holiday shopping. Consumers transacted via mobile devices at a remarkable rate, as evidenced by the surge in activity on Black Friday. November 25th, or Black Friday, became the first day in retail history to account for over one billion dollars in mobile revenue, totaling $1.2 billion, according to Adobe.

While the digital sector of the retail industry carried this momentum throughout the season, department stores underperformed, relative to their digital counterparts. While sales at traditional, brick-and-mortar stores still account for a vast majority of all retail purchases, the digital channel continues to gain share in the retail industry. This holiday season, brick-and-mortar sales fell 10 percent, and store traffic fell 12 percent however, average order value rose 4.8 percent, according to RetailNext. Despite the consistent, and continued, growth of the digital sector, consumers are still saving their biggest purchases for brick-and-mortar stores, even if they are spending less money at these stores over the course of the entire holiday season.

While online merchants have a lot to celebrate in the aftermath of the holiday season, they also have a glaring concern: chargebacks. Chargebacks, those transactions that are disputed by a consumer’s issuing bank, at the request of the consumer, are very prevalent for online merchants, particularly after the holiday season. Chargebacks occur so frequently after the holiday season that the second Tuesday in January has been dubbed “Chargeback Day.” If they’re not careful, online merchants can lose significant portions of their revenue to chargebacks and chargeback fees.

In addition to chargebacks, these merchants must worry about, and monitor, their conversion rates, the rate at which visitors of their website become consumers by making a purchase. Typically, merchants that create a frictionless consumer experience on their digital channels will have outstanding conversion rates, and will maintain a satisfied consumer base, which will create additional revenue. But, merchants that maintain a friction-filled consumer experience will consistently lose consumers and will see their conversation rates plummet, as these consumers will likely leave their website, and never return.

The holiday season is supposed to be the most wonderful time of the year. But if online merchants aren’t prepared, they will find coal, rather than revenue, in their stocking. Connect with Cardinal to learn more about Cardinal Consumer Authentication, how it can reduce chargebacks and how it can ultimately improve your online business. With your One Connection to Cardinal, we can drive your digital commerce.